Capebay Holdings Pty Ltd v Marks Healy Sands
[2003] WASC 9
CAPEBAY HOLDINGS PTY LTD -v- MARKS HEALY SANDS [2003] WASC 9
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASC 9 | |
| Case No: | CIV:1160/1999 | 4 DECEMBER 2002 | |
| Coram: | PULLIN J | 15/01/03 | |
| 5 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | CAPEBAY HOLDINGS PTY LTD MARKS HEALY SANDS |
Catchwords: | Costs Application for costs order against non- party Turns on own facts |
Legislation: | Supreme Court Act 1935, s 37(1) |
Case References: | Capebay Holdings Pty Ltd v Marks Healy Sands [2002] WASC 287 Duskwood Pty Ltd v Bellara Willows Pty Ltd [2001] WASC 281 Vestris v Cashman (1998) 72 SASR 449 Knight v F P Special Assets Ltd (1992) 174 CLR 178 Money Tree Management Services Pty Ltd v DCT (No 2) (2000) 207 LSJS 287 Montague Mining Pty Ltd v Gore [2001] FCA 791 Yates v Boland [2000] FCA 1895 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
MARKS HEALY SANDS
Defendant
Catchwords:
Costs - Application for costs order against non- party - Turns on own facts
Legislation:
Supreme Court Act 1935, s 37(1)
Result:
Application dismissed
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr G A Pestell
Defendant : Ms S E Harrison
Solicitors:
Plaintiff : Murcia Pestell Hillard
Defendant : Mallesons Stephen Jaques
Case(s) referred to in judgment(s):
Capebay Holdings Pty Ltd v Marks Healy Sands [2002] WASC 287
Duskwood Pty Ltd v Bellara Willows Pty Ltd [2001] WASC 281
Vestris v Cashman (1998) 72 SASR 449
Case(s) also cited:
Knight v F P Special Assets Ltd (1992) 174 CLR 178
Money Tree Management Services Pty Ltd v DCT (No 2) (2000) 207 LSJS 287
Montague Mining Pty Ltd v Gore [2001] FCA 791
Yates v Boland [2000] FCA 1895
(Page 3)
1 PULLIN J: Following my decision dismissing the plaintiff's claim against the defendant as reported in Capebay Holdings Pty Ltd v Marks Healy Sands [2002] WASC 287, the defendant has sought orders that Adrian Min Yan Lee and Chew Lan Sim should be jointly and severally responsible for paying the costs of the action. Chew Lan Sim is Mr Lee's mother, and they are the only directors of the plaintiff.
2 They have not been joined as parties. I note that in Duskwood Pty Ltd v Bellara Willows Pty Ltd [2001] WASC 281, the non-party was joined as a party before the application was made that the non-party pay costs. As will appear, it is not necessary for me to decide in this case whether this is a necessary step before making such a costs order.
3 Ms Harrison, the solicitor with conduct of the proceedings on behalf of the defendant, has sworn an affidavit in support of this application, which reveals that on or after the second day of trial she and counsel for the defendant advised counsel and solicitors for the plaintiff that in the event that the defendant successfully defended the claim, the defendant would seek joint and several personal costs orders against Mr Lee and Mrs Sim. This warning was repeated on 4 December 2002 by facsimile.
4 The affidavit of Ms Harrison also says that the defendant does not know what ability the plaintiff has to pay any costs order made against it, and deposes to the fact that a company search reveals that the company has issued 300,002 shares, two of which are held by Chew Lan Sim as trustee for the Lee Family Trust and 300,000 of which are beneficially held by Leagle Trading Pte Ltd in Singapore. The affidavit also deposes to the fact that in 1995 there was a fixed and floating charge over the plaintiff for the benefit of Westpac Banking Corporation, but that on 27 March 2002 a notice of satisfaction of the charge and release of property was filed. Ms Harrison says in her affidavit "as it was not clear that the plaintiff was impecunious no application was made for security for costs as we reached the view that we did not have sufficient evidence to ensure the application would succeed".
5 Ms Harrison also deposes to the fact that the defendant made offers to settle the proceedings, which offers were rejected.
6 During evidence in the trial, Mr Lee gave evidence that the plaintiff was a corporate vehicle through which he and his mother bought the Wembley Shopping Centre and the Wembley Hotel to their benefit. Mr Lee said that it could have been any company which purchased the property, and that it just happened to be Capebay Pty Ltd. The evidence
(Page 4)
- reveals that at different times, different entities were proposed as the purchaser of the properties, with Mr Lee deciding who would make the offers.
7 Steytler J in Duskwood Pty Ltd v Belaara Willows Pty Ltd (supra) reviewed the authorities concerning the circumstances in which costs orders would be made against a person who is not a party to the relevant proceedings. The Court has jurisdiction to make such orders by virtue of s 37(1) of the Supreme Court Act 1935, but, as Steytler J noted, the power to make an order of this kind will rarely be exercised. Factors which bear upon the discretion to make such a special order for costs were referred to by Lander J in Vestris v Cashman (1998) 72 SASR 449 at 468, where he said:
"In exercising the discretion regard would be had to whether the non-party could have been joined as a party earlier in the proceedings and thereby obtained the protection of the rules of court; whether the non-party has had any warning that an application for costs against that party would be made; whether, in those circumstances, the non-party could have applied to be joined in the proceedings and thereby had the capacity to influence the proceedings or the non-party could have protected itself by making an offer in accordance with the rules; whether if a warning had been given the non-party could have terminated the proceedings by discontinuance, negotiation, payment or otherwise; whether the party who would otherwise be usually liable for costs can meet an order for costs and if relevant the reason why that party cannot meet an order for costs; whether it was apparent at any earlier stage in the proceedings, and if so when, that the party could not meet costs; whether the moving party should have sought an order for security for costs; the relationship, if any, between the non-party and the party who would usually be liable for costs; whether the non-party has caused the proceedings; whether the non-party has funded the proceedings; whether the non-party stood to benefit by the litigation and if so how; whether the non-party had a direct or indirect financial interest in the litigation; and whether there has been any improper conduct on the part of the non-party.
None of the matters will necessarily be decisive."
(Page 5)
8 There are a number of factors in this case which militate against making costs orders against the two non-parties. First, the warning that such an application would be made was given only after the trial commenced, and only after evidence was given by Mr Lee. Secondly, the fact that Mr Lee had chosen different corporate vehicles to make offers, was something which was known to the defendant before the trial via the discovered documents. Thirdly, no attempt has been made to show that the plaintiff will not be able to pay the costs. In that regard, I note that the plaintiff owns both the Wembley Shopping Centre and the Wembley Hotel, and that the charge in favour of Westpac has been discharged. Fourthly, there was no evidence referred to on this application about who funded the proceedings. Fifthly, no attempt was made by the defendant to apply for security for costs. I note in relation to this last point that the defendant's advisors considered that such an application would not succeed.
9 Those factors lead me to the conclusion that I should decline to exercise my discretion to make orders against the non-parties.
10 I therefore dismiss the application.
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